Image courtesy of Shell

A new analysis of the second half 2013 Pennsylvania Marcellus shale oil and gas production shows the vast majority of Royal Dutch Shell’s 630 wells are under performing compared to its peers, according to

“In northeast Tioga County, Shell’s wells are producing at less than half the rate of its area competitors,” the report said.

Shell’s new CEO Ben Van Beurden said Thursday the company would cut spending on onshore U.S. operations by 20% and begin selling assets.

Van Beurdan said, “Overall, we are working through the fundamental shake-up of the resources play portfolio and the way we operate,”

Independent energy analyst Bill Powers said Shell has spent more than $9 billion on development of Marcellus shale gas production.

In 2010, Shell spent $4.7 billion to acquire Marcellus shale holdings from East Resources Inc.

In early 2013, Shell took a $2.1 billion write down on its U.S. shale operations said.

Shell and Chesapeake Energy are among the biggest Marcellus players.

Both are “struggling to make profit on their U.S. shale oil and gas operations,” said.

“Since 2012, both companies have taken billions in write downs on claimed U.S. shale gas reserves which turned out to be non viable.”

Chesapeake Energy has been selling assets, trying to raise cash to cover its $20 billion in total debt, said.


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